COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.:1443S.05P Bill No.:Perfected SS for SCS for SB 466 Subject:Tax Credits; Taxation and Revenue - Income; Agriculture Type:Original Date:February 25, 2025Bill Summary:This proposal modifies provisions relating to agricultural tax credits.
FISCAL SUMMARY
ESTIMATED NET EFFECT ON GENERAL REVENUE FUNDFUND
AFFECTED
FY 2026FY 2027FY 2028Fully
Implemented
(FY 2030)
General Revenue
Fund*
$0$0$0
Could Exceed
($10,665,762 to
$41,200,000)
Total Estimated
Net Effect on
General
Revenue $0$0$0
Could Exceed
($10,665,762 to
$41,200,000)
Oversight reflects impact for FY 2030, as a continuation of all tax credits within the proposal as
of January 1, 2029 (redeemed in FY 2030).
ESTIMATED NET EFFECT ON OTHER STATE FUNDSFUND
AFFECTED
FY 2026FY 2027FY 2028Fully
Implemented
(FY 2030)
MASBDA
Account* $0$0$0$0
Total Estimated
Net Effect on
Other State
Funds $0$0$0$0
*Oversight notes the Missouri Agricultural and Small Business Development Authority
(MASBDA) account will net to zero as the collected fee under Section. 348.491 is used to pay
for MDA FTE needed. L.R. No. 1443S.05P
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Numbers within parentheses: () indicate costs or losses.
ESTIMATED NET EFFECT ON FEDERAL FUNDSFUND
AFFECTED
FY 2026FY 2027FY 2028Fully
Implemented
(FY 2030)
Total Estimated
Net Effect on
All Federal
Funds $0$0$0$0
ESTIMATED NET EFFECT ON FULL TIME EQUIVALENT (FTE)FUND
AFFECTED
FY 2026FY 2027FY 2028Fully
Implemented
(FY 2030)
General Revenue
Fund* 0 FTE0 FTE0 FTE(Unknown)
Total Estimated
Net Effect on
FTE 0 FTE0 FTE0 FTE(Unknown)
☒ Estimated Net Effect (expenditures or reduced revenues) expected to exceed $250,000 in any
of the three fiscal years after implementation of the act or at full implementation of the act.
☐ Estimated Net Effect (savings or increased revenues) expected to exceed $250,000 in any of
the three fiscal years after implementation of the act or at full implementation of the act.
ESTIMATED NET EFFECT ON LOCAL FUNDSFUND
AFFECTED
FY 2026FY 2027FY 2028Fully
Implemented
(FY 2030)
Local
Government$0$0$0$0 L.R. No. 1443S.05P
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FISCAL ANALYSIS
ASSUMPTION
Oversight was unable to receive some of the agency responses in a timely manner due to the
short fiscal note request time. Oversight has presented this fiscal note on the best current
information that we have or on prior year information regarding a similar bill. Upon the receipt
of agency responses, Oversight will review to determine if an updated fiscal note should be
prepared and seek the necessary approval to publish a new fiscal note.
Section 135.305 Wood Energy Tax Credit
In response to the previous version of the proposal, officials from the Department of Revenue
noted this proposal removes the expiration language of the wood energy tax credit which would
allow the credit to continue into the future. The Wood Energy tax credit program was created in
1985 to encourage the use of forest waste products (sawdust) to create new products. It is
allowed an annual cap of $6 million but it is an appropriated credit. The General Assembly in
FY 2025 appropriated $3,000,000. Here are the appropriations that have been made the last few
years.
Fiscal YearAppropriatedAction2025$3,000,0002024$3,000,0002023No appropriation given2022$760,000Vetoed by Governor2021$1,500,000Governor withheld funding
There is no fiscal impact from the removal of the expiration date. However, should the program
actually be allowed to expire this could result in an unknown savings to the State of up to the $6
million allowed to be appropriated.
In response to the previous version of the proposal, officials from the Office of Administration
– Budget & Planning (B&P) assumed this proposal would allow the wood energy tax credits to
be taken against financial institution and insurance premium taxes under Chapter 148, rather than
corporate franchise taxes under Chapter 147. B&P notes that the corporate franchise tax has been
eliminated since 2016.
This proposal does not change the annual $6 million limit. In addition, tax credits can only be
taken against the GR portion of each tax. Therefore, this provision will not impact TSR.
Oversight notes, per the Tax Credit Analysis submitted to the Oversight by the Department of
Natural Resources (DNR) the Wood Energy Tax Credit had the following activity: L.R. No. 1443S.05P
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Wood Energy Tax
Credit
FY 2019
Actual
FY 2020
Actual
FY 2021
Actual
FY 2022
Actual
FY 2023
Actual
FY 2024
Actual
Certificates Issued
(#)
988 0 6 0 Projects/Participants
(#)
9 88 0 6 0 Amount Authorized$678,887 $1,455,000 $717,800$0$3,000,000$2,358,276Amount Issued$678,887 $1,455,000 $717,800$0$3,000,000$2,358,276Amount Redeemed$789,077 $1,105,678 $1,014,359$557,144$1,656,582$1,982,009
Oversight notes that per DNR budget request book, DNR 2025 budget request, DNR notes that
The Wood Energy Tax Credit sunset in FY 2023 and was extended by HB 3 in the First
Extraordinary Session of 2022. FY 2023 appropriation language did not allow for tax credits to
be issued in FY 2023. A FY 2023 Supplemental Bill passed, with language allowing expenditure
for the tax credits, tied to an additional $3,000,000, for a total of $6,000,000 appropriated. To
prevent exceeding $3,000,000 allowed for the credit, the department placed $3,000,000 of the
appropriation in agency reserve. (FY 2025 DNR Budget Request)
Oversight notes the proposal terminates the sunset for this section.
Oversight notes the DNR average three-year authorization, as shown by DNR tax credit analysis
above (2022-2024) total $1,786,092 (0+3,000,000+2,358,276) / 3)). Since the cap for the Wood
Energy Tax Credit is $6 million annually (subject to appropriation), for purposes of this fiscal
note, Oversight will report the tax credit as a continuation of the current appropriation level
$1,786,092 to the $6 million cap beginning in Fiscal Year 2030.
Section 135.686 Meat Processing Tax Credit Program
In response to the previous version of the proposal, officials from the Department of Revenue
(DOR) assumed this proposal is removing the stop date of the Meat Processing Tax Credit
program. The Meat Processing tax credit program was created in 2018 to provide
reimbursement of expenses to owners of meat processing facilities that expanded or made
improvements to their facilities. It originally shared a $2 million cap with the Qualified Beef
program until HB 3 passed in the extraordinary session of 2022 gave it its own $2 million cap.
DOR presents the issuances and redemptions over the life of the credit.
YearIssued
Total
Redeemed
FY 2024$860,662.58$388,194.44 L.R. No. 1443S.05P
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FY 2023$462,912.46$562,925.24FY 2022$1,304,244.48$493,224.61FY 2021$829,675.76$573,398.04FY 2020$1,162,452.67$380,371.14FY 2019$552,807.59$214,777.94FY 2018$286,781.89$5,561.00
There is no fiscal impact from the extension of the sunset date. However, should the program
actually be allowed to be sunset this could result in an unknown savings to the State of up to its
$2 million cap.
Oversight notes the proposal terminates the sunset for this section.
Oversight notes, currently, for all tax years beginning on or after January 1, 2017, but ending on
or before December 31, 2028, a taxpayer shall be allowed a tax credit for meat processing
modernization or expansion as it relates to the taxpayer’s meat processing facility.
Therefore, for purposes of this fiscal note, Oversight will report the extension of this tax credit
as a reduction to GR by an amount “up to” $875,940 (the three (3) year average amount of Meat
Processing Facility Investment Tax Credits issued) to $2,000,000 beginning in Fiscal Year 2030.
Section 135.772 Ethanol Retailers Tax Credit Program
In response to the previous version of the proposal, officials from the Department of Revenue
assumed this proposal removes the sunset clause from the Ethanol Retailers Tax Credit Program.
This tax credit program was created in HB 3 from the extraordinary session of 2022 and was
modified again in SB 138 in the 2023 session. The program was given a $5 million annual cap.
At this time, DOR does not have information on the usage of the program as it has just started.
There is no fiscal impact from the removal of the sunset clause language. However, should the
program actually be allowed to stop this could result in an unknown savings to the State of up to
its $5 million cap.
Oversight notes, for all tax years beginning on or after January 1, 2023, a retail dealer that sells
higher ethanol blend at such retail dealer’s service station is allowed a tax credit to be taken
against the retail dealer’s state income tax liability. The tax credit shall be equal to five cents
($0.05) per gallon of higher ethanol blend sold. The tax credits authorized shall not be
transferred, sold, or assigned. The tax credits authorized shall not be refundable. Any amount of
tax credits that exceeds a taxpayer’s tax liability shall be permitted to be carried forward to any
of the five (5) subsequent tax years.
Oversight notes the State of Iowa (Iowa) provides several tax credits for biofuel sales by
retailers and blenders. Two (2) of Iowa’s tax credits are the E15 Plus Gasoline Promotion Tax
Credit and E85 Gasoline Promotion Tax Credit. L.R. No. 1443S.05P
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Iowa’s E15 Plus Gasoline Promotion Tax Credit is available to retail dealers of gasoline who sell
blended gasoline that is classified as E15 Plus but not classified as E85 gasoline. Currently,
Iowa’s tax credit is considered seasonal; providing various amounts of credit(s) at different times
of the year. From June 1 – September 15 of each year, the tax credit is awarded at $0.10 per
gallon. At all other times, the tax credit is awarded at $0.03 per gallon.
Based on Iowa’s Biofuel Tax Credits - Tax Credit Program Evaluation Study from December
2024, Oversight notes the following taxpayer claims for the E15 Plus Gasoline Promotion Tax
Credit for Tax Years 2017-2022 in Iowa below:
Tax
YearCorporationIndividual
Pass-
ThroughTotal
2017$138,555 $446,045 $1,479,038 $2,063,638 2018$205,875 $5,809 $1,905,902 $2,117,586 2019$312,524 $18,218 $2,921,595 $3,252,337 2020$461,434 $13,685 $3,615,495 $4,090,614 2021$645,210 $18,024 $4,901,234 $5,564,468 2022$1,409,135 $575,029 $1,883,047 $3,867,211
*Source: Iowa Biofuel Tax Credit Program Evaluation Study - Table 13 on p.43
Iowa’s E85 Gasoline Promotion Tax Credit is available to retail dealers of motor fuel that sell
E85. A tax credit can be claimed for each gallon of E85 sold by the retailer during the tax year.
The current tax credit is calculated at $0.06 per gallon.
Oversight notes the taxpayer claims to the E85 Gasoline Promotion Tax Credit for Tax Years
2017-2022 in Iowa below:
Tax
YearCorporationIndividual
Pass-
ThroughTotal
2017$648,105 $133,577 $1,906,343 $2,688,025 2018$688,996 $27,732 $2,150,928 $2,867,656 2019$797,094 $22,502 $2,003,071 $2,822,667 L.R. No. 1443S.05P
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2020$799,583 $23,879 $1,392,859 $2,216,321 2021$921,888 $36,563 $2,058,399 $3,016,850 2022$1,039,504 $52,668 $2,064,441 $3,156,613
*Source: Iowa Biofuel Tax Credit Program Evaluation Study - Table 14 on p. 44
Using the 9 State Energy Consumption Estimates – 1960 through 2019, published by the U.S.
Energy Information Administration, Oversight compared various energy consumption estimates
for Iowa and Missouri. Oversight provides the comparison below:
2019 - State Energy Consumption Estimates - U.S. Energy Information Administration
Iowa and MissouriIowaMissouri
Iowa As a Percent
of Missouri
Barrels of Fuel Ethanol4,274,0007,378,00058%
Total Motor Gasoline -
Including Fuel Ethanol
(btu)
186,900,000,000,000376,200,000,000,00050%
Total Fuel Ethanol (btu)14,900,000,000,00025,700,000,000,00058%
Total Energy Consumption
by End - Use Sector
(Transportation)
303,100,000,000,000555,100,000,000,00055%Iowa As a Percent of Missouri/Topic Average55%
Oversight assumes, based on the Iowa and Missouri energy consumption comparison shown
above, that Iowa’s fuel ethanol operations (specific to end user consumption/transportation)
could be operating at 55% capacity of Missouri’s fuel ethanol operations.
Using information included in Iowa’s Biofuel Retailers Tax Credits Program Evaluation Study
(December 2019), Oversight reviewed the amount of tax credits claimed in 2016 for Iowa’s E15
Plus and E85 Promotion Tax Credit(s) to estimate the number of gallons sold by tax credit
claimants and compared such estimate to the actual number of gallons sold: L.R. No. 1443S.05P
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State of Iowa Summary
E85 Gasoline Promotion Tax Credit
Iowa
Actuals
(2016)
Amount
Claimed
Iowa Tax Credit %
Oversight
Estimated
Number of
Gallons
Claimed By
Tax Credit
Claimants
Actual
Number of
Gallons
Sold
Actual
Total
Number of
E15-20 &
E85
Gallons
Sold In
Iowa
E85 is a
blend of
gasoline
that
contains
between
70% and
85%
ethanol.
$2,143,259 $0.16 per gallon13,395,368.75 13,471,861
E15 Plus Gasoline Promotion Tax CreditIowa
Actuals
(2016)
Amount
Claimed
Iowa Tax
Credit %
Amount
Claimed
Per %
June 1 -
September
15 - $0.10
per gallon
$227,620
E15 Plus
are blends
of gasoline
that
contain
between
15% and
69%
ethanol
$426,788
All Other
Dates -
$0.03 per
gallon
$199,168
8,915,127.11 9,034,588
22,506,449
Oversight notes the amount of estimated gallons sold by tax credit claimants and the actual
amount of gallons sold are very similar. Therefore, Oversight anticipates a near one hundred
percent (100%) participation rate in Missouri for each gallon of qualifying fuel sold.
Oversight notes, based on the data reported above, the total amount of E-15 & 20 & E85 gallons
sold in Iowa during 2016 totals 22,506,449. L.R. No. 1443S.05P
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If the assumption that Iowa’s fuel ethanol operations are operating at 55% capacity of Missouri’s
fuel ethanol operations is accepted, Oversight estimates Missouri’s total E15 Plus and E85
gallons sold could total 40,920,816 gallons (22,506,449 / 55%). Oversight notes, a tax credit
equal to $0.05 per gallon would generate a total amount of tax credits equal to $2,046,041
(40,920,816 * $0.05).
Oversight notes the tax credit created would automatically be sunset on December 31, 2028;
however, by the repeal of the sunset the proposal reauthorizes continuation of the tax credit after
the date.
Oversight notes the actual usage and impact of this proposed legislation is unknown. For
purposes of this fiscal note, Oversight will report a revenue reduction to GR equal to a range
beginning with an amount “Up to” $2,046,041 (as estimated by Oversight) to $5,000,000
beginning in Fiscal Year 2030.
Section 135.775 Biodiesel Retailers Tax Credit Program
In response to the previous version of the proposal, officials from the Department of Revenue
assumed this proposal removes the sunset clause on the Biodiesel Retailers Tax Credit Program.
This tax credit program was created in HB 3 from the extraordinary session of 2022 and was
modified again in SB 138 in the 2023 session. The program was given a $16 million annual cap.
At this time, DOR does not have information on the usage of the program as it has just started.
There is no fiscal impact from the removal of the sunset clause language. However, should the
program actually be allowed to stop this could result in an unknown savings to the State of up to
its $16 million cap.
This proposal adds language that should the credit be apportioned, and that apportionment causes
a balance-due notice to be generated, the taxpayer will be granted 60 days to make their payment
before interest and penalties can be assessed on the balance-due. DOR assumes no impact from
this provision.
In response to the previous version of the proposal, officials from the Office of Administration
– Budget & Planning (B&P) assumed this proposal would waive additions to tax, interest, and
penalties on tax liabilities resulting solely from a tax credit limit-denial, if the resulting tax due is
paid within 60 days. B&P notes that this would only apply to tax credits that are apportioned
among taxpayers if redemptions are greater than the amount allowed per statute or appropriation.
B&P notes that currently taxpayers are encouraged to remit their full tax liability, calculated
before a tax credit, in case their tax credit claim is denied. However, based on additional
information taxpayers are not actually able to remit a payment above the balance due amount
shown on their original return until that amount has been amended by DOR. Therefore, taxpayers
receiving apportioned credits end up with a tax due notice, with interest and penalties currently
levied on the overdue amount. L.R. No. 1443S.05P
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Based on information provided by DOR, this provision could reduce TSR by an unknown, likely
minimal, amount.
Oversight notes the officials from the B&P assumed there is minimal impact due to the penalty
provision and DOR assumes no fiscal impact stemming from the penalty-interest provision for
this tax credit. Oversight does not have any information to the contrary. Therefore, Oversight
will reflect a zero impact in the fiscal note.
Oversight notes that Missouri ranked among the top one-third of states in biodiesel consumption
of 30 million gallons in 2022. [per latest EIA data] (State by State Biodiesel Consumption
EIA.GOV
show the lower estimated impact as average of the total sales between 2% & 5% because the
actual sales information does not indicate the percent of mix of the fuel estimates. Oversight
calculates the average of sales as follows:
Total Consumption 202230,000,0002% credit per gallon 600,0005% credit per gallon1,500,000
Average of 2% & 5%$1,050,000
Oversight, notes the following taxpayer claims for the Biodiesel Blended Fuel Tax Credit for
Tax Years 2017-2022 in Iowa below:
Tax
YearCorporationIndividual
Pass-
ThroughTotal
2017$3,448,447 $1,020,987 $14,997,231 $19,466,665 2018$5,078,248 $199,403 $15,249,544 $20,527,195 2019$7,401,473 $205,852 $15,743,068 $23,350,393 2020$7,687,481 $189,448 $15,725,667 $23,602,596 2021$7,248,109 $273,422 $14,444,740 $21,966,271 2022$5,628,574 $4,010,792 $7,303,268 $16,942,634
*Source: Iowa Biofuel Tax Credit Program Evaluation Study - Table 15 p. 45 L.R. No. 1443S.05P
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Oversight notes that the DOR reported the FY 2024 redemption amount total
$1,238,009Therefore, Oversight will reflect the estimated impact of reduction in general
revenues beginning Fiscal Year 2030 ranging from $1,238,009 up to all available cap of
$16,000,000.
Section 135.778 Biodiesel Producers Tax Credit Program
In response to the previous version of the proposal, officials from the Department of Revenue
assumed this proposal removes the sunset clause on the Biodiesel Producers Tax Credit Program.
This tax credit program was created in HB 3 from the extraordinary session of 2022 and was
modified again in SB 138 in the 2023 session. The program was given a $5.5 million annual
cap. At this time, DOR does not have information on the usage of the program as it has just
started.
There is no fiscal impact from the removal of the sunset clause. However, should the program
actually be allowed to stop this could result in an unknown savings to the State of up to its $5.5
million cap.
Oversight notes the section further clarifies & adds a language regarding distributors that sell
biodiesel blend directly to final users located in the state. Oversight assumes the clarification will
not have an additional fiscal impact.
Oversight notes that Missouri ranked among the top one-third of states in a biodiesel production
of 247 million gallons in 2022. Oversight will assume that there is range of 50% and 100%
participation rate in this program for purpose of this fiscal note.
Origination TypeTax Credit* Annual
Consumption
TotalBlend of at least eighty percent
feedstock originates in Missouri
($0.02 * 247,000,000)*.8 $ 3,592,000 100% percent blend($0.02 * 247,000,000)*1 $4,940,000 Average of both @ 100%
participation rate
$4,266,000 Average of both @ 50% participation
rate
$2,133,000
Oversight notes the proposal eliminates the sunset for this section.
Oversight notes that the DOR reported the FY 2024 redemption amount total $2,265,248
Therefore, Oversight will reflect the estimated impact of reduction in general revenues beginning
Fiscal Year 2030 ranging from $2,265,248 up to all available cap of $5,500,000. L.R. No. 1443S.05P
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Section 135.1610 Urban Farm Tax Credit Program
In response to the previous version of the proposal, officials from the Department of Revenue
(DOR) assumed this proposal removes the sunset clause on the Urban Farm Tax Credit Program.
This tax credit program was created in 2022 to provide a credit to help people start urban farms
in their neighborhoods. The program was given a $200,000 annual cap. At this time, DOR does
not have information on the usage of the program as it has just started.
There is no fiscal impact from the removal of the sunset clause language. However, should the
program actually be allowed to stop this could result in an unknown savings to the State of up to
its $200,000 cap.
Oversight notes the Senate Substitute allows for the maximum of $25,000 award to one of the
potential applicant, and the total tax credit must not surpass $200,000 annually for the entire
program. Therefore, there could be potentially a minimum of 8 ($200,000/$25,000) urban farms
who could receive the tax credit.
Oversight notes this proposal allows for recapture of tax credits issued in circumstances where
the use of the tax credit is deemed for the personal benefit of the taxpayer thus in violation of the
act. Therefore, Oversight will reflect an unknown saving to the General Revenue in the fiscal
note beginning FY 2030.
Section 137.1018 Rolling Stock Tax Credit Program
In response to the previous version of the proposal, officials from the Department of Revenue
(DOR) assumed this proposal is removing the sunset clause of the Rolling Stock Tax Credit
program. The Rolling Stock tax credit program was created in 1999. It is an appropriated credit
with no limit as the amount that can be appropriated. The General Assembly in FY 2025
appropriated $500,000. For informational purposes only, DOR is providing the amount of
appropriations that have been made the last few years.
Fiscal YearAppropriatedAction2025$500,0002024$200,0002023$200,0002022$02021$02020$02019$02018$02017$600,000Governor withheld $300,0002016$300,0002015$2,000,000Governor vetoed2014$4,000,000Governor vetoed L.R. No. 1443S.05P
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There is no fiscal impact from the removal of the sunset clause language. However, should the
program actually be allowed to stop this could result in an unknown savings to the State of up to
the $4 million the highest appropriated amount to date.
Oversight notes the Rolling Stock Tax Credit recognized the following history:
Rolling Stock Tax CreditFiscal Year201820192020202120222023 2024 Amount
Authorized$0 $0 $0 $0 $0 $194,000 $194,000
Amount Issued$0 $0 $0 $0 $0 $0 $0 Amount
Redeemed$0 $0 $0 $0 $0 $0 $0
For additional information regarding the Rolling Stock tax credit program, please refer to the
Oversight Division’s sunset review performed in 2019.
https://www.legislativeoversight.mo.gov/oversight/Sunset_Reviews/Rolling.pdf
Oversight notes the proposal eliminates the sunset for this section.
For purposes of this fiscal note, Oversight will report a costs to the General Revenue (GR) equal
to a range, beginning at $0 (no appropriation is made for the Rolling Stock Program) “up to or
could exceed” $200,000 (highest final approved budget authority to date, future appropriations
could be larger) beginning in Fiscal Year 2030.
Section 348.436 Agricultural Product Utilization Contributor and the New Generation
Cooperative Tax Credit Programs.
In response to the previous version of the proposal, officials from the Department of Revenue
(DOR) assumed this proposal removes the stop date on the Agricultural Product & New
Generation Coop Tax Credit Programs. These tax credit programs were created in 1999 to
encourage investment in the agricultural field. These two programs share a $2 million annual
cap. Here are the authorizations, issuances and redemptions of these programs over the last
several years.
Ag Product
YearIssued
Total
Redeemed
FY
2024$73,133.75$10,357.00 L.R. No. 1443S.05P
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FY
2023$11,000.00$137,762.00
FY
2022$0.00$305,376.33
FY
2021$146,325.46$654,873.01
FY
2020$182,377.36$2,713,522.64
FY
2019$168,988.98$2,278,431.86
FY
2018$4,048,690.27$2,785,905.52
FY
2017$2,908,334.26$2,638,868.14
FY
2016$2,513,350.09$1,553,332.97
FY
2015$2,376,167.67$1,051,661.96
FY
2014$1,573,719.77$2,022,953.37
FY
2013$1,062,510.26$1,267,239.12
FY
2012$2,479,356.45$1,468,155.74
New Generation
YearAuthorizedIssued
Total
Redeemed
FY 2025 $0.00FY 2024$0.00$0.00$680,420.53FY 2023$0.00$0.00$1,533,528.18 L.R. No. 1443S.05P
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FY 2022$3,000,000.00$2,322,480.13$2,274,059.00FY 2021$12,650,000.00$3,406,311.34$462,260.73FY 2020$1,500,000.00$360,000.00$467,167.83FY 2019$3,153,843.50$0.00$840,615.09FY 2018$2,011,156.50$1,931,717.01$1,431,010.11FY 2017$1,873,475.00$2,383,129.06$2,093,123.93FY 2016$1,481,529.00$1,278,144.64$1,730,341.67FY 2015$7,938,220.00$2,112,545.32$2,842,869.70FY 2014$4,267,500.00$4,426,280.23$4,747,229.63FY 2013$5,612,982.00$4,937,489.74$2,100,091.11FY 2012-$652,500.00$2,023,500.00$826,952.82
There is no fiscal impact from the removal of the sunset date. However, should the programs
actually be allowed to be sunset this could result in an unknown savings to the State of up to its
$2 million shared cap.
Oversight notes this proposed legislation eliminates the sunset date for the Agricultural Product
Utilization Contributor Tax Credit, as authorized under Section 348.430 and the New Generation
Cooperative Incentive Tax Credit, as authorized under Section 348.432.
Oversight notes if on May 1st of each year the Missouri Agricultural and Small Business
Development Authority determines that any of the $6,000,000 will not be utilized as New
Generation Cooperative Incentive Tax Credits then the unused credits may be sold as
Agricultural Product Utilization Contributor Tax Credits. Credits not issued as New Generation
Cooperative Incentive Tax Credits or sold as Agricultural Product Utilization Contributor Tax
Credits lapse June 30th of each year.
Oversight notes the five (5) year average (Fiscal Year(s) 2020 – 2024) amount of Agricultural
Product Utilization Contributor Tax Credit(s) issued equals $764,378.
Oversight notes the five (5) year average (Fiscal Year(s) 2021 – 2025) amount of New
Generation Cooperative Incentive Tax Credit(s) issued equals $990,054.
Therefore, for purposes of this fiscal note, Oversight will report the extension of these tax
credits as a reduction to GR by an amount “up to” $1,754,432 (the combined five (5) year
average amount of tax credits issued ($764,378 + $990,054)) to the shared cap of $6,000,000,
beginning in Fiscal Year 2030. L.R. No. 1443S.05P
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Section 348.491 & 348.493 Specialty Agricultural Crops Tax Credit Program
In response to the previous version of the proposal, officials from the Department of Revenue
(DOR) assumed this proposal removes the sunset clause language on the Specialty Agricultural
Crops Tax Credit Program. This tax credit program was created in 2022 to provide credit to
farmers to help them get started in farming. The program was given a $300,000 annual cap. At
this time, DOR does not have information on the usage of the program as it has just started.
There is no fiscal impact from the removal of the sunset clause language. However, should the
program actually be allowed to stop this could result in an unknown savings to the State of up to
its $300,000 cap.
Oversight notes that according to the United States Department of Agriculture – Census of
Agriculture
by Acres Harvested (2022 and 2017)), there were 3,654 existing farms involved in cultivation of
such a harvest. The breakdown is shown below:
Vegetables 1,388
Orchards 1,559
Berries 853
Total 3,800
Oversight notes the proposal limits this loan opportunity only to those farms with annual gross
sales below $100,000. According to the MDA website there are currently 90,000 farms in
Missouri. https://agriculture.mo.gov/aboutMDA.php
Oversight notes, using data for Missouri (2022 Census Volume 1, Chapter 1: State Level Data -
Table 1 Historical Highlights), that there are currently about 74,135 farms which would
potentially qualify for this program. The data regarding Special Crop Farms above, does not
specify the annual sales produced by each farm (above or below $100,000).
Table 1.
Market Value Sold
(product in $)Farm(s)
Less than ,100020,4731,000 to 2,4997,0212,500 to 4,9997,1485,000 to 9,9999,62310,000 to 19,9999,67320,000 to 24,9993,33725,000 to 39,9996,77240,000 to 49,9993,353 L.R. No. 1443S.05P
Bill No. Perfected SS SCS SB 466
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50,000 to 99,9996,735Total 74,135
However, Oversight notes that using MDA and U.S. Census for Agriculture, there could be
potentially about 82.4% (74,135 / 90,000) of all Special Crop Farms (from 3,800) making below
the $100,000 limit. This would represent about 3,131 farms currently harvesting special crops
and potentially eligible for up to $35,000 loan.
Oversight notes the proposal eliminates the sunset for this section.
Oversight notes Section 348.491 allows for one-time maximum loan of $35,000 per such a farm.
The lender is then required to forgive the first year’s interest on such a loan.
Oversight notes Section 348.491 allows for one-time maximum loan of $35,000 per such a farm.
The lender is then required to forgive first year interest on such a loan.
Oversight notes the total amount of loans is not restricted, however the lender tax credits
proposed in Section 348.493 below are restricted to $300K. According to MASBDA (see HB
1720 – 2022), agriculture loans are typically made at higher interest rates than a home mortgage
or vehicle. They estimate interest rates for the loans associated with this program could be from
5% - 10%.
• 5% rate: The potential loans would be up to $6M ($300,000 = .05x; x = $300,000/.05) and
potential fees would be up to $60K ($6M x 1%).
• 10% rate: The potential loans would be up to $3M ($300,000 = .10x; x = $300,000/.10) and
potential fees would be up to $30K ($3M x 1%).
MDA, in further conversations with Oversight via e-mail in response to the previous version of
the proposal, notes that MASBDA currently does not receive any General Revenue or Federal
funds to administer any programs. All revenues are fee based and used to pay for administrative
costs. The assumption is that a nonrefundable application fee of $100 will be charged to each
applicant. Section 348.080 gives MASBDA the authority to collect fees and charges, as the
authority determines to be reasonable, in connection with its loans, advances, insurance,
commitments, and servicing.
Oversight notes that MDA, via phone-call with Oversight in response to the previous version of
the proposal, noted the fee is deposited to the MASBDA account that is used to pay for the
necessary FTEs to run the program.
Therefore, Oversight will show the potential gain in revenue, in FY 2030 from the collection of
the 1% in fees to the MASBDA, as a range from less or more of higher amount of $60,000 if the
lender applies 5% interest for the loans. L.R. No. 1443S.05P
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Additionally, Oversight will reflect cost to the MASBDA account for the FTE’s needed to
comply with the program.
Lastly, will reflect MASBDA account nets to zero due to the 1% collection fee paying
for the FTE needed to run the program in FY2030.
In response to the previous version of the proposal, officials from the Department of
Commerce and Insurance (DCI) noted:
Section 135.686:
A potential unknown decrease of premium tax revenues (up to the tax credit limit established in
the bill) in FY2026, FY2027, and FY2028 as a result of the modification of the Meat Processing
Facility Investment tax credit. Premium tax revenue is split 50/50 between General Revenue and
County Foreign Insurance Fund except for domestic Stock Property and Casualty Companies
who pay premium tax to the County Stock Fund. The County Foreign Insurance Fund is later
distributed to school districts throughout the state. County Stock Funds are later distributed to the
school district and county treasurer of the county in which the principal office of the insurer is
located. It is unknown how each of these funds may be impacted by tax credits each year and
which insurers will qualify for the tax credit.
Oversight notes, for purposes of this fiscal note, the fiscal note does not reflect the possibility
that some of the tax credits could be utilized against insurance premium taxes. If this occurs, the
loss in tax revenue would be split between the General Revenue Fund and the County Foreign
Insurance Fund, which ultimately goes to local school districts.
Overall, Bill:
In response to the previous version of the proposal, officials from the Department of Revenue
(DOR) assumed if these credits had been allowed to sunset it could have resulted in savings to
general revenue of $41 million annually. These savings would not have been realized until after
the original sunset dates in 2028. However, with the removal of the sunset clause, these programs
will be ongoing. DOR assumes no fiscal impact from these changes as DOR had assumed they
would have been renewed.
Lastly,
computer programs to make the necessary changes ($1,832). This is estimated to cost $4,032.
In response to the previous version of the proposal, officials notes Office of Administration –
Budget & Planning (B&P) assumed this proposal would sunset language for ten active tax
credits and one active loan program. As these programs are still active, this proposal will: - Not
impact TSR. - Not impact the calculation under Article X, Section 18(e). - Not impact B&P. L.R. No. 1443S.05P
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In response to the previous version of the proposal, officials from the Department of Economic
Development, the, and the Department of Natural
Resources each assumed the proposal will have no fiscal impact on their organization.
Oversight does not have any information to the contrary. Therefore, Oversight will reflect a zero
impact in the fiscal note.
In response to the previous version of the bill, officials from the Missouri Department of
Transportation, the Missouri Department of Conservation both assumed the proposal will
have no fiscal impact on their organization. Oversight does not have any information to the
contrary. Therefore, Oversight will reflect a zero impact in the fiscal note for above respective
agencies.
The Oversight Division is responsible for providing a Sunset Report pursuant to Section 23.253
RSMo; however, Oversight can absorb the cost with the current budget authority. Therefore,
Oversight will reflect a zero impact in the fiscal note.
In response to the previous version of the proposal, officials from the City of Kansas City
(CKC), the City of O’Fallon, and the City of Osceola both assume the proposal will have no
fiscal impact on their organization. Oversight does not have any information to the contrary.
Therefore, Oversight will reflect a zero impact in the fiscal note for the CKC.
Rule Promulgation
In response to the previous version of the proposal, officials from the Joint Committee on
Administrative Rules assumed this proposal is not anticipated to cause a fiscal impact beyond
its current appropriation.
In response to the previous version, officials from the Office of the Secretary of State (SOS)
noted many bills considered by the General Assembly include provisions allowing or requiring
agencies to submit rules and regulations to implement the act. The SOS is provided with core
funding to handle a certain amount of normal activity resulting from each year's legislative
session. The fiscal impact for this fiscal note to the SOS for Administrative Rules is less than
$5,000. The SOS recognizes that this is a small amount and does not expect that additional
funding would be required to meet these costs. However, the SOS also recognizes that many
such bills may be passed by the General Assembly in a given year and that the costs may be in
excess of what the office can sustain with its core budget. Therefore, the SOS reserves the right
to request funding for the cost of supporting administrative rules requirements should the need
arise based on a review of the finally approved bills signed by the governor.
FISCAL IMPACT – State
Government
FY 2026
(10 Mo.)
FY 2027FY 2028Fully
Implemented
(FY 2030) L.R. No. 1443S.05P
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GENERAL REVENUE FUND
Cost – Section 135.305 –
Extension of the Wood Energy
Tax Repeal of Sunset
p.4 $0$0$0
($1,786,092)
or up to
($6,000,000)
depending on
appropriation
Costs – Section 135.686 -
Extension of Meat Processing
Facility Investment Tax Credit
repeal of sunset p.5$0$0$0
($875,940)
Up to
($2,000,000)
Costs – Section 135.772 – Tax
Credit For Ethanol Blended Fuel
Sales repeal of sunset p.8$0$0$0
($2,046,041)
Up to
($5,000,000)
Cost – Section 135.775 – Tax
Credit for Retail Sellers of
Biodiesel repeal of sunset p.9$0$0$0
($1,238,009)
Up to
($16,000,000)
Cost - Section 135.778 – Tax
Credit for Producers of
Biodiesel repeal of sunset - p.10$0$0$0
($2,265,248)
Up to
($5,500,000)
Cost – Section 135.1610 Urban
Tax Credits repeal of sunset -
p.11 $0$0$0
Up to
($200,000)
Cost – Section 137.1018 -
Rolling Stock Tax Credits - p.12$0$0$0
Up to
($200,000)
Cost – All above Sections FTE
to administer tax credits$0$0$0(Unknown)
Cost – Section 348.493.2 –
Special Crop Lenders Tax
Credit - p.12-14$0$0$0
Up to
($300,000)
Cost – Section 348.436 –
Utilization Contributor and New $0$0$0
($1,754,432)
Up to L.R. No. 1443S.05P
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FISCAL IMPACT – Local
Government
FY 2026
(10 Mo.)
FY 2027FY 2028Fully
Implemented
(FY 2030)
$0$0$0$0
FISCAL IMPACT – Small Business
A direct fiscal impact to small businesses would be expected as a result of this proposal as many
will be able to take advantage of the proposed extension amongst various business tax credits.
Generation Tax Credits - p.12($6,000,000)
ESTIMATED NET EFFECT
ON GENERAL REVENUE
FUND $0$0$0
Could
exceed
($10,665,762
to
$41,200,000)
Estimated Net FTE Change on
General Revenue0 FTE0 FTE0 FTE(Unknown)
MISSOURI
AGRICULTURAL AND
SMALL BUSINESS
DEVELOPMENT
AUTHORITY ACCOUNT
Revenue Gain – 1% Application
review fee - p.14$0$0$0($60,000)
Cost – MDA FTE – to maintain
and comply with the program
p.14 $0$0$0(Unknown)
ESTIMATED NET EFFECT
ON THE MISSOURI
AGRICULTURAL AND
SMALL BUSINESS
DEVELOPMENT
AUTHORITY ACCOUNT$0$0$0$0 L.R. No. 1443S.05P
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FISCAL DESCRIPTION
This act modifies provisions relating to agricultural tax credits.
WOOD ENERGY TAX CREDIT
A tax credit for the production of certain wood-energy processed wood products expires on June
30, 2028. This act repeals such sunset. (Section 135.305)
MEAT PROCESSING FACILITIES TAX CREDIT
The Meat Processing Facility Investment Tax Credit for the expansion or modernization of meat
processing facilities expires on December 31, 2028. This act repeals such sunset. (Section
135.686)
HIGHER ETHANOL FUEL TAX CREDIT
A tax credit for the sale of higher ethanol blend fuels expires on December 31, 2028. This act
repeals such sunset. (Section 135.772)
BIODIESEL RETAIL SALE TAX CREDIT
A tax credit for the sale of biodiesel fuels expires on December 31, 2028. This act repeals such
sunset.
This act provides that a taxpayer shall not be liable for penalties or interest on an income tax
balance due if such taxpayer is denied part or all of a tax credit to which the taxpayer has
qualified due to lack of available funds, and such denial causes a balance-due notice to be
generated by the Department of Revenue or any other redeeming agency. Such taxpayer shall
pay the balance due within sixty days or be subject to penalties and interest pursuant to current
law. (Section 135.775)
BIODIESEL PRODUCTION TAX CREDIT
A tax credit for the production of biodiesel fuels expires on December 31, 2028. This act repeals
such sunset. (Section 135.778)
URBAN FARMS TAX CREDIT
A tax credit for the establishment or improvement of urban farms expires on December 31, 2028.
This act repeals such sunset. (Section 135.1610)
ROLLING STOCK TAX CREDIT L.R. No. 1443S.05P
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A tax credit for eligible expenses incurred in the manufacture, maintenance, or improvement of a
freight line company's qualified rolling stock expires on August 28, 2028. This act repeals such
sunset. (Section 137.1018)
AGRICULTURAL PRODUCTION TAX CREDITS
Tax credits for contributions to the Missouri Agriculture and Small Business Development
Authority and investments in new generation cooperatives for the purpose of development of
agricultural business expire on December 31, 2028. This act repeals such sunset. (Section
348.436)
SPECIALTY AGRICULTURAL CROPS
The "Specialty Agricultural Crops Act" loan program for family farmers and tax credits for
lenders expires on December 31, 2028. This act repeals such sunset. (Sections 348.491 and
348.493)
This legislation is not federally mandated, would not duplicate any other program and would not
require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Revenue
Office of Administration – Budget & Planning
Missouri Department of Agriculture
Department of Economic Development
Missouri Department of Conservation
Department of Natural Resources
Missouri Department of Transportation
Joint Committee on Administrative Rules
Oversight Division L.R. No. 1443S.05P
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City of Kansas City
City of O’Fallon
City of Osceola
Julie MorffJessica HarrisDirectorAssistant DirectorFebruary 25, 2025February 25, 2025